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A Pause for Profit-Taking?

By Paul Cherney On Thursday, unless there is a bullish headline, I would expect a little more consistent profit-taking with a negative close for both the Nasdaq and the S&P 500. Prices will probably not be able to move dramatically lower but some weakness would be natural after Wednesday's attempt to follow through higher really did not attract enough buyers to overwhelm the sellers.

Upside is probably a struggle. Downside, too.

If the Nasdaq manages to print below 1553.70, then downside risk would open for prints between 1551-1540.19, but a significant plunge would be unlikely unless there is a headline of undeniably bearish importance.

The next significant layer of

support for the Nasdaq is 1519.00-1489, but if prices gap lower at Thursday's open, buyers might become interested in prints of 1539 and lower.

The S&P 500 has a layer of support at 948-935.

Immediate S&P 500

resistance is now from 951-965.00. S&P 500 965.00 represents the high established Aug. 22, 2002 and a price move above this level, even though prices might retrace and come back underneath 965.00, would be positive price action and would signal to many chart readers that the bottoming process which started in June and July of 2002 has been completed.

The Nasdaq has its next layer of resistance at 1554-1594.24, with a focus of 1557-1577. Intraday price projections based on extremely high readings of volume moving into Nasdaq prices on Tuesday suggest that the first prints near 1577-1584 will probably bring sellers to the market for a few trading days. Cherney is chief market analyst for Standard & Poor's

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